Every prudent and visionary investor should have a game plan on how to build up an offshore nest egg to ensure their assets are not only protected but are also primed for unfettered growth in complete privacy. It is therefore important to not only understand how the “offshore world” works but it is also vital to recognize and capitalize on the corresponding advantages tied to it.
There have been a lot of talks recently about the benefits of “offshore” companies and trusts for small business owners and investors. It is essential however that we filter the information we are being fed to know the part that represents correct or factual information. One of the major myths out there is that it is expensive and not viable for the average person. This is simply not true as the cost of establishment is about $2,000 to $3,000 only. Another myth out there is that it is illegal to setup a company or trust in a jurisdiction that is considered a “tax haven”. Again, this is not true. As a matter of fact, there are over 50 so-called “tax havens” around the world today and this number is set to grow further as competition for globalized financial services heats up among nations. These jurisdictions or “tax havens” have laws and policies which tend to be far more liberal and protective of you than possibly your own government. While this may be true, you still have to abide by the laws of these jurisdictions. In reality, legal problems will only arise if you have an offshore structure that tends to violate laws in the country where you are a tax payer or resident.
Many people look to an offshore company or trust purely as an investment vehicle but going offshore offers so much more than this so here is a closer look on how one can truly benefit from setting up an offshore company or trust.
Taxation – A properly structured offshore company can help a business legally realize huge tax savings and in some cases resulting to zero tax liability (legally). Some countries levy inheritance taxes but with a properly structured offshore company, this threat to your heirs’ finances can be eliminated.
Investment Opportunities – One can gain access to investments that one would otherwise not have access to. An offshore company in the right jurisdiction will be allowed access to just about any investment it is interested in.
Business – An offshore company can be utilized for a wide variety of uses that will bring any business substantial benefits. An offshore company strategy can benefit businesses such as importing, exporting, consulting, e-commerce, manufacturing, professional services and shipping.
Asset Protection – It facilitates an additional layer of protection for you and your assets against claims like professional negligence claims, product liability claims or nuisance claims by creditors, governments, litigants, and other people or organizations with malicious intent keen on inflicting the most damage to your finances.
Privacy & Confidentiality – Establishing an offshore company or trust is an end goal in itself by businesses or people seeking privacy for their assets or finances. If an offshore entity has been set up correctly, it will make it virtually impossible for any information seeker to obtain information about you and about what you are doing with your money. This is due to data privacy/secrecy laws in place in most of the countries or jurisdictions hosting offshore entities.
The above highlighted reasons may still not convince you about the advantages of an offshore company or trust but if you look at some of the trends today, in particular divorce rates and the increased efforts of your government to tax you to the teeth, you will realize that an offshore option can save you from financial distress. Losing out a huge percentage of your assets is never going to be pleasant so do not allow unforeseen circumstances to dictate your financial future.
On the contrary, if you have decided that an offshore company or trust suits you and your business needs, don’t just jump the gun and go for anything that comes your way. Please be reminded that they are not all the same. There are good ones as well as there are bad ones and you really need to do your homework as you need to recognize that it takes time to set up a structure offshore and to get to know how to use it. Failing to conduct due diligence may result in an undesirable situation where you will be held guilty for “fraudulent conversion” or tax evasion. Remember that by planning ahead and by learning more about an offshore model, risks can be mitigated and the likelihood of any unwanted surprises can be avoided.
Nobody can really forecast what the future will bring however there are certain things that we can reasonably predict with a degree of certainty, and that is, our privacy and freedom will always be at risk of being compromised by our elected governments. Several laws aimed at restricting, controlling and intimidating us have been enacted already. To combat these practices, we can only turn to our wealth. Wealth affords you the freedom to come and go as you please – to do what you want. Governments know this and this is why they exert their power and influence in an attempt to control your wealth; to have control over you! The offshore company or trust disrupts these attempts by governments to undermine you. The offshore model “short circuits” the system and allows you to be in control of your wealth giving you that opportunity to “opt out”.
But then again, you may simply want to spend money on yourself overseas without anybody back home knowing about it or you just want to run an “offshore business” to benefit from the tax breaks that come with it or you simply want to take advantage of better returns for your investment (better than the returns in your home country). Whatever your reason maybe, you have to keep in mind that when an investment compounds its return without the burden of tax, it will take you half the time to reach your financial goals. This could get you retired ten or fifteen years earlier than expected. Think about the possibilities!